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  1. U.S. Consumers Fail on Credit Score Survey

    May 16, 2013 by editor

    Yikes, guys. Yikes. Just read a scary stat– several, actually, proving that Americans know diddly squat about credit and credit scores. PLEASE tell me our readers don’t fall into these percentages of consumers who scored horribly! It sounds like many consumers knew what could help their credit rise, but had no idea about the types of things that could really harm their credit. It’s as important to be informed about the latter as it is the former, however. Otherwise, consumers will just be walking around inadvertently lowering their credit because they just don’t know any better. Kathy Lynch of Financial Advisor Magazine reported the other day,

    “A lack of knowledge about credit scores could prove costly for consumers. A survey released today found that about 40 percent of respondents did not know that mortgage lenders use credit scores to determine credit availability and pricing. About the same percent wrongly believe that age and marital status are used in calculating the scores.

    “Misperceptions about credit scores are extremely concerning to us,” said Barrett Burns, president and CEO of VantageScore Solutions, which released the survey along with the Consumer Federation of America (CFA).”

    Click here to see what other questions consumers failed to answer correctly.

    OK boys it’s time to go back to Credit Scoring 101. It’s crazy that Americans are so unschooled in the credit department, considering how many of us have credit cards, car loans, mortgages, student loans… Time to brush up on your credit knowledge!

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  2. Key Factors in Understanding How Credit Works

    May 13, 2013 by editor

    I see this happen all the time: people unknowingly damaging their credit score because they don’t understand how their score is factored, or what exactly influences the number. Things like closing a credit card account after it’s been paid off, or going after the credit cards with the freebies–even if that means having 5 or 6 open credit accounts, all of which have hit your credit when they checked you out for eligibility. But then, there’s just the key components that make up a credit score, the specifics which most people are surprisingly a bit hazy about. Ashlea Ebeling of Forbes jotted down five of the biggest credit misconceptions, and how they can hurt a consumer, taking care of course to counter those with how to make the credit system work in your favor:

    “Key factors about credit scores continue to be widely misunderstood, and the misconceptions are potentially costing consumers tens of thousands of dollars, according to a conference held today by the Consumer Federation of America and VantageScore Solutions, a FICO competitor.

    “People who fail to understand exactly what can impact their score have little incentive to manage the things that can truly make a difference,” said Barrett Burns, president and chief executive of VantageScore Solutions.”

    Click here to read about the key factors that can affect your credit score, and which ones are often misconceived.

    Fun fact from Ebeling’s article: on a standard 60-month auto loan taken for $20,000, a consumer with a poor credit score would pay about $5,000 more in interest charges than a borrower with a really good score. So literally, having a good score is like money in your pocket.

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  3. Does Credit Matter if You Don’t Need a Loan or Credit Card?

    May 13, 2013 by editor

    The question recently popped up on my radar, that if you’re not planning on taking out a loan (be it for a house, a car, or what have you) or applying for a credit card, what is the point of maintaining good credit? Well folks, I’m sure that the percentage of us who are in that boat is pretty few and far between. The person that posed the question stated that they had $300,000 in their savings and a pension that takes care of all their needs. To be so lucky! So as rare of a question as this may be, it’s still a good question to answer for those wondering how else their credit might impact them. Because the answer is in fact that credit can and most likely will impact you outside of applying for a house loan or credit card. There are many other ways the credit scores come into play on a fairly frequent basis. Claudia Buck of the Modesto Bee reported:

    “If you’re not applying for a loan or a credit card, does your credit history really matter? This week, certified financial planner Kimberly Foss, owner of Empyrion Wealth Management in Roseville, Calif., has the answer.

    QUESTION: Should I care about my credit rating? I don’t owe anything and have no plans to move or buy a house. I have a pension that takes care of all my needs and $300,000 in savings. I use a Costco American Express credit card and pay it off monthly. Does my credit rating matter?”

    Click here to find out whether credit matters if you’re not planning on applying for a loan or credit card.

    Hopefully even if you are planning on taking out a loan in the future, or plan to apply for a credit card either soon or down the road, you still read this article. It offers great insight about the other ways that your credit score will be considered for other facets in life, some of them as you can see not even obviously related to finance. Bottom line– maintain a good credit score regardless of age, social circumstance, money in the bank, or present needs and you will never have to worry about it.

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  4. 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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  5. 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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  6. Baby Boomers Still Need Credit Scores

    May 6, 2013 by editor

    I read this great article recently that explored people needing credit scores once their mortgage has been paid off and they’re not planning on buying a new car, refinancing their home, etc. Bottom line? Credit scores are still important! Baby boomers included. People might think that at some point in life, they can rest easy and not worry about their score. Well, what about taking out student loans for kids or grandkids if they don’t have enough credit themselves, or unexpectedly go back to grad school? Or purchasing a boat, a vacation home, or something else fun that might come up in retirement. The point is, even if your home is paid off and you don’t foresee a “big ticket loan” in your future, you should still be checking your credit report to monitor its accuracy and still be working on maintaing a good credit score– or actively trying to improve it, if it’s not the best. You just never know when something will come up and you’ll be glad your credit is rock solid. Here’s what Oklahoma’s semiweekly newspaper, the Broken Arrow Ledger, had to say about it:

    “Maintaining a good credit profile is important at all stages of life, even for baby boomers who may have paid off their mortgages and don’t anticipate the need for more big-ticket loans. But it’s important to remember credit scores are used for more than just borrowing money, and you never know when an opportunity or emergency might pop up where credit is needed.

    To be sure, maintaining good credit can benefit everyone from vacation home shoppers to those seeking college tuition loans, and it can help you acquire financing in the event that you’d rather use credit than cash. What can baby boomers do to maintain good credit scores or improve lower scores?”

    Click here to read about why credit scores matter in all walks of life, especially at the Baby Boomer age.

    So remember, you’re never too old to learn something new, set a new goal, dream a new dream, or need a good credit score. OK, so the first three are actual quotes… I made the last one up. But that doesn’t make it any less true. :)

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  7. 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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  8. 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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  9. 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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  10. A Quarter of American Men Have Never Checked their Credit!

    April 24, 2013 by editor

    I had to share this article, just HAD to, because it’s a statistic I nearly did not believe when I first read it. Now, you can say statistics can be skewed to support any argument, taken out of context, and so forth. But this is one number that’s pretty black and white. According to a new survey taken by FindLaw.com, 18% of all women and 25% of all men that actually have credit reports have never checked them–not once. This is totally shocking to me, considering how important a credit score (and in turn a credit report) weighs into so many financial aspects of life–car loans, home loans, student loans, credit cards, even employment. What’s even MORE mind blowing is that credit reports are FREE to check once per year! It’s not like people even have to pay money for them. And fellas let’s be honest… we’re lagging in the credit-check department. Women have us beat by 7%. That’s a pretty decent number when you figure how many people there are in the U.S.! Check out this Thomson Reuters article to learn more:

    “Despite its importance in everything from obtaining a credit card or mortgage to employment background checks, nearly a quarter of Americans have never checked their credit report, according to a new survey by FindLaw.com, the most popular legal information website.

    Twenty-two percent of Americans have never checked their credit report to verify the accuracy of the information, even though by law, credit reporting agencies are required to provide free copies upon request.”

    Click here to learn more about the FindLaw.com study, and about how to obtain a free credit report.

    OK guys, now that you have the scoop about how to check your credit report and why credit is so important, the only thing left is to go actually check it. C’mon… don’t be included in that 25% that is in the dark about their credit! You can’t fix credit errors if you don’t know they’re there. True story.

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