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‘Finance’ Category

  1. Making Rent Count Toward Your Credit

    May 13, 2013 by editor

    It seems a little bizarre to me that while rent is, for many of us, one of the biggest checks that gets cut each month, it by and large falls by the wayside in terms of being counted on a credit report. There are a couple of credit bureaus out there who take it into consideration, but for the most part it has been an untapped resource for taking a look into renters’ financial histories. Which is silly to me, because paying rent on time is just as important as paying your credit cards on time– at least, I think so. I think that it demonstrates how financially responsible somebody is, and can forecast a pattern: diligently pays rent on time, frequently late, or never pays on time. These are things that ought to be included on somebody’s credit report–for better or worse–but of course I like to hope that the majority of renters will win with this, as they pay rent on time and actually get to reap the benefits of seeing the good mark on their report and watch their score spike up. Until all the credit bureaus get on board with including rent however, renters must fend for themselves and find ways to make their rent checks count. Check out this article from Abby Hayes titled “4 Ways Renters Can Boost Their Credit Scores:”

    “Not too long ago, paying rent didn’t have much to do with your credit score. Not paying rent could (and still can) wreck your credit score. If you were behind enough to have your account sent to a collections agency, your past-due rent would likely be reported as negative information to the credit bureaus.

    Rental rates in the United States are skyrocketing because of foreclosures, an unstable housing market, and the general hesitance of younger Americans, especially, to buy homes. While renting can be a good option for many, historically it has not been helpful in building a credit score.”

    Click here to read about the ways that you can have your rent count towards your credit score.

    So if you are a renter, be sure to take advantage of these outlets to get your rent to count towards your score. My hope is that someday, this will be an automatic inclusion but until then renters have to take an extra step. But hey– it’s totally worth it if it helps your credit score out, because the better your score, the lower your interest rates. Which is basically like money in your pocket!

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  2. Americans’ Financial Woes Lowest In Years

    May 7, 2013 by editor

    Good news on the financial front, folks! Apparently, American consumers are less worried about finances and money than we were last year, and the year before, and the year before that. In fact, according to Gallup Wellbeing, Americans’ financial worry has overall dipped to the lowest level that we’ve seen since 2007, aka pre-recession. That should make us all feel pretty good, right? Obviously there is a shift in the U.S. economy that people are picking up on. Employment is up, people feel more financially secure, things are heading in the right direction. In my mind, there was one topic missing from the seven financial potential “stressors” that Gallup Wellbeing polled Americans on, and that question would go something like this: how worried are you about your credit score or your ability to get a loan? Maybe something to add for next year, no? Here is what Jeffrey M. Jones of Gallup Wellbeing had to report:

    Gallup’s Financial Worry Graph

    “Americans’ financial worry has eased to the lowest level since before the recession. Gallup classifies 53% of Americans as highly or moderately worried about their finances, down from a peak of 61% a year ago, and the lowest since 45% in 2007.

    The results are based on Gallup’s annual Economy and Personal Finance survey, conducted each April beginning in 2001. As part of the survey, Gallup has asked Americans how much they worry about seven different personal financial matters, including retirement, maintaining their current standard of living, medical costs, housing costs, and paying normal monthly bills.”

    Click here to read more about the survey, and see exactly how Americans ranked each financial worry.

    Overall, I think it’s a great sign that we’re moving away from the recession–physically and emotionally. Americans are less stressed about money and finances in general, and that takes a huge weight off of our shoulders whether we realize it or not.

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  3. A Credit Score that Ignores Collections Reports

    May 6, 2013 by editor

    Ever wished you could hit “undo” and get rid of a financial faux pax that simply will not drop off of your credit report, and is dragging down the score? Well, now your wish may come true–somewhat. Vantage Score, one of the major credit score generators in the U.S., is adopting the practice of not including collections reports on consumer credit reports. The catch? They have to be paid. If a claim is still in limbo, or you haven’t paid it off, expect it to be present on your report. Apparently over 50% of collections reports are medical bill-related, and Vantage Score discovered that paid collections reports are actually not all that accurate in giving lenders a good idea of how a consumer will act going forward with a loan. Instead, the factors that are more trustworthy and accurate are the length of consumers’ credit account and the size of their loans. Here is what Tara Siegel Bernard of the New York Times had to report:

    “Megan Barringer had no idea that a medical billing mix-up over a $742 charge for a back evaluation six years ago could end up costing her more than $33,000.

    But the old bill, which she ultimately paid, had gone to collections and showed up as black mark on her otherwise clean credit report. Ms. Barringer said she found out about it only when she applied for a mortgage last month and got an interest rate that was half a percentage point more than it would otherwise have been. As a result, she is paying an extra $94 a month on the $298,000 loan she took out on a three-bedroom ranch in Dallas, adding up to tens of thousands of dollars over the life of her 30-year fixed-rate mortgage.”

    Click here to read about this new policy when it comes to credit reports, and the effect that it could have on your score.

    Now, considering that some 7 million people stated in 2012 that errors in billing (and not on their end, mind you,) were the cause for them to be sent to collections in the first place last year, this new policy could mean a whole lot to these folks. However, I still maintain that as a personal policy, we all should be checking our credit 1-3 times per year (it’s free, people!!) that way you don’t find out when you go to apply for a mortgage or car loan, you know of the error well in advance and can take action to fix it.

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  4. Hurricane Sandy Wreaks Havoc on Credit Reports

    May 2, 2013 by editor

    Have you guys heard the latest abomination about the Hurricane Sandy victims having incredible amounts of trouble with their credit reports? Basically, Sandy displaced hundreds of people, some of them who are still living in hotels or other people’s homes, and a pretty obvious side effect of this disastrous situation is that people got behind on rent, mortgage payments, or sadly maxed out their credit card limits paying for things like hotels or rental cars. I think it’s pretty obvious that these people should not be penalized for a horrific natural disaster that put a severe strain on the finances of so many. There is good news, however, and that is that Governor Andrew Cuomo is working on convincing credit bureaus to go easy on the storm victims. Nobody should be held at fault for something that Mother Nature caused, right? I think so. The Associated Press reported,

    “Ask Allison Puglisi about how Sandy not only destroyed her home, but also ruined her credit, making it even more difficult to get a toehold on stability. ”This has been just as stressful” as Sandy, she said.

    The disabled South Beach woman would get some relief if Gov. Andrew Cuomo persuades credit scoring and rating bureaus go lightly on storm victims, as he pledged he would do Thursday during a meeting in his Manhattan office with consumer advocates.”

    Click here to read more about the financial side effects that Sandy brought in its wake, and what else is being done on the victims’ behalf.

    Folks, if you are out there feeling strongly about this, I highly recommend rallying for these people. The Governor has done his part in requesting that the credit bureaus reset the scores of those that had been lowered, and now it’s just up to the credit bureaus to act out of compassion (and, I think, common sense.) Speak up if you agree and let’s get everybody on the same page!

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  5. Employment Opportunity Act Passes in CO

    April 29, 2013 by editor

    Good news for job seekers and prospective employees: Colorado has become the latest and ninth state to pass legislation that will effectively prevent employers from using credit reports of job candidates or current employees for hiring or other employment purposes. This has been a longstanding issue that has seen its fair share of debates, and the Colorado General Assembly has finally passed what is being touted as the “Employment Opportunity Act.” We at RoadFish are pretty pumped for this legislation. I feel personally that it will be effective in helping to end a difficult cycle for many people, the cycle being needing a job to pay for past debt and correct financial mishaps but not being hired because of those same issues. It’s foolish to expect people to be able to start paying off debt without a job, and even crazier that those same people who really need a job are denied one because of financial misfortunes that probably have nothing to do at all with their work ethic, capabilities in a professional position, and talents. In my opinion, it’s about time for those things to be separated and I’m happy that Colorado has become the lasted state to agree and take action. Jim Flynn of the Colorado Springs Gazette reported the big news yesterday morning:

    “After years of debating the issue, the Colorado General Assembly has passed and sent to the governor for signature a bill (SB13-018) restricting the right of employers to use consumer credit reports in making employment-related decisions — hiring, firing, demotions, promotions, reassignments, etc.

    As is now the trend, this new law has been given a catchy name — the “Employment Opportunity Act.” Its purpose seems to be to allow people with not-so-good credit to get jobs — as long as those jobs don’t involve anything the General Assembly considers very important.”

    Click here to learn more about the Employment Opportunity Act and exactly what it entails.

    Colorado’s law will go into effect July 1st, 2013. Folks, if you agree with this way of thinking and don’t live in one of the nine states that have already passed supportive legislation (California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont, Washington and now Colorado), make sure you speak up and let your voice be heard!

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  6. Security Freeze Questions Answered

    April 22, 2013 by editor

    If you have never been a victim of identity theft, be it with medical insurance, tax refund theft, or any other kind you should consider yourself lucky–unless, of course, you’ve been taking proactive steps to avoid ever landing in that situation. In which case, you’re smart! One of the tactics that people turn to when attempting to ward off identity thieves is resorting to a security freeze. Security freezes, also known as credit freezes, essentially prevent lenders from having access to a consumer’s credit without the express permission of that consumer. In other words, it acts as a road block for identity thieves, rendering them unable to open other lines of credit or take out loans by using somebody else’s information. There are pros as well as cons when using this type of strategy, and Jason Alderman explores them in a well-written article that will help you to truly understand what security freezes are for, when to use them, and what potential negative side effects they come with. Here’s what Alderman has to say:

    “Although the odds of having your identity stolen remain quite low, anyone who’s ever been had their bank or credit card account compromised knows what a pain it can be to unravel the mess. Sometimes enterprising hackers just need your Social Security number, address and date of birth to start opening new accounts in your name.

    Many victims don’t realize anything’s wrong until they apply for a new account and find their credit has been trashed; or, they start getting calls from collection agencies regarding unfamiliar accounts. More and more people have begun blocking access to information in their credit reports, even if there hasn’t yet been any fraudulent activity, by instituting a “security freeze.” “

    Click here to read Alderman’s full article, and become a master on how and why credit freezes work.

    So is a credit freeze right for you? You’re the only person who can determine that. However, if you’re looking for more insight and info on the topic, each of the three major U.S. credit bureaus (Experian, Equifax, and TransUnion) have additional information that can be found on their websites. Check them out if you’re still in the gray area of wondering whether or not to put a credit freeze in place for yourself.

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  7. UK Struggles with Credit Rating & Economic Recovery

    April 22, 2013 by editor

    I wanted to take a moment to look beyond the U.S. and to our friends over in the UK who are experiencing a struggle at the moment with economic recovery. This comes at a time when their credit rating was reduced from its perfect triple-A status to an AA+, which granted is still a good rating but definitely a letdown for the people of England. In comparison, the U.S.’ credit rating is AA+ but I think that’s understandable with the amount of debt we have and the current worth of the dollar– not so great. Just wanting to give the UK a foreign mental hug and let them know that everything is going to be okay. This is what Reuters has to say about the state of the UK’s economy, and the new outlook on its credit rating:

    “Fitch stripped Britain of its top-grade AAA rating on Friday, but unlike rival Moody’s – which did the same in February – it gave the new rating a stable outlook.

    “The biggest question mark that continues to hang over the UK is the economic recovery,” Fitch analyst David Riley said in an interview with Reuters Insider television.”

    Click here to read the Reuters article announcing the credit rating lowering, and the outlook for the UK.

    Unlike credit rating company Moody’s, I see great hope for the UK and its people. It is such a strong nation, united and prosperous. There is none like Englad that I can think of, and I can’t imagine that this current misfortune will be anything other than a blip on the long and fruitful history of the UK when we’ll look back in the coming years.

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  8. Short Sales Appear as Bad as Foreclosures on Credit Report

    April 18, 2013 by editor

    So I’m opting to stay on the topic of foreclosures and similar misfortunes, because as it turns out, short sales and foreclosures are essentially seen as one in the same in terms of how the events are recorded on a credit report, and viewed in the eyes of lenders. It sounds bizarre, but evidently there is no special code to designate that a home has had a short sale as opposed to being foreclosed on, so the two appear interchangeable on a credit report. But most standards, a homeowner whose house has been foreclosed is eligible for new loans 7-10 years after the foreclosure, and short sales are about 2 years. But when there’s no apparent difference between the two on a credit report, short sellers find themselves in the ballpark of needing to wait 7 years to be allowed to borrow money again. Check out this fascinating article by Drew Harwell of the Tampa Bay Times:

    “When his home’s value plunged, George Albright opted to sell it for less than he owed, believing the “short sale” would scar his credit less than a foreclosure. But after saving for a down payment and building back his credit, the single father learned he still wouldn’t qualify for a new loan. After two years in the penalty box, underwriters said, he still had five more years to go.

    To his surprise, his credit history showed a foreclosure, a “kiss of death” stemming from a strange credit quirk. Banks and credit bureaus have no special code to report a short sale.”

    Click here to read the crazy truth about how short sales and foreclosures are viewed the same way on credit reports.

    Pretty crazy, right? Makes me want to petition the crap out of whoever makes the codes for the credit reports, so that foreclosures and short sales can get proper differentiation. It’s not ok with me that people who put in the work to sell their house, scraping up what they’re capable of for the house payment, are put into the same arena as those who did not make that same effort.

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  9. How Foreclosures Affect Credit

    April 17, 2013 by editor

    Let’s talk about foreclosures, shall we? Not anybody’s favorite topic to be certain, but something that many Americans have unfortunately had to deal with thanks to tough times during the recession. There was an article posted this week addressing the question of how long a foreclosure will stay on a credit report, and if the outstanding balance on the mortgage stays on as well. I thought it was a good article to pass along, because I’m sure other people have similar questions about their foreclosures and “overdue” mortgage payments. Deanna Templeton of Credit.com knows her stuff, and supplied some good advice and input on what happens after a house gets foreclosed on in terms of credit history and reports.

    “Foreclosures can do a number on your credit report, even for years after they happened. With the Great Recession causing an upheaval in the housing market and many homeowners behind on payments, the aftermath of foreclosures is still a reality for many Americans today. One reader wrote to Credt.com asking for help with a foreclosure on her credit report:

    My home has been foreclosed but the second mortgage is still showing an outstanding balance on my credit report — should that be? How do I remove this? I expect “foreclose” status to remain for seven years but not the amount. Am I right?”

    Click here to read Templeton’s answer to this question, and her expert input on foreclosures.

    Good-to-know information. In my opinion, it is comforting to know that everything bad on your credit does eventually go away–even the big stuff like bankruptcy and foreclosures. It is hard, but giving things time really does heal all manner of evils (credit report evils included.)

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  10. Props to Credit Score Aid Programs

    April 16, 2013 by editor

    I wanted to give a big shout out to The Center for Working Families, at Kennedy-King College–  a non-profit organization that works to help people turn around or establish credit through an incremental system of borrowing and paying back money. The center is part of Metropolitan Family Services, an admirable organization that prides itself in “responding to the evolving and critical needs of families in Chicago and the suburbs… providing the help and hope needed to support the amazing strength of families during the difficult times in life.” I stumbled upon this story about one man in particular that really touched me, and I just had to share. It’s a story of hard work and triumph, with the help of some people who care a whole lot. It’s amazing to me what people can accomplish together. Here is the story of Nigel Williams as told by Wendell Hutson of the DNAReporter:

    “A year ago, Englewood resident Nigel Williams had a credit score of 0 — and huge hurdles to climb in finding a job or buying a home. Williams had moved to Chicago three years ago from Jamaica, where “you could use cash for everything and did not need a credit card,” said Williams, who never had a bank account or even applied for credit. “But I quickly learned once I came to America that credit is a must over here.”

    But today, Williams’ credit score is 701 — thanks to The Center for Working Families at Kennedy-King College. He has four bank accounts and a Visa with a $3,000 credit limit.”

    Click here to read about how the Center for Working Families helped one man literally change his life through bettering his credit score.

    Now don’t get so high and mighty as to think that there are probably other causes “more worthy” of people’s time than helping others work on their credit score. The fact is that in most other countries–even European first-world ones–a credit score is not needed, not looked at, not regarded. But in the U.S., having a good or at least decent score is often times the only thing in between people being able to buy a house or car, which would literally change their life. So yes, it can be a life-changing, life-bettering experience.

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