10 things your debt collector doesn’t want you to know

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Nobody likes to face a debt collector. A call from a debt collector could be a symptom of financial hardship, or it could simply be an irritating reminder that you forgot to pay your doctor bill. Either way, you’re not happy.   Even so, you should definitely pick up the phone.  A bill going to collections can have a substantial impact on your FICO® Scores. It’s possible for a debt collector to start calling you before the collections has hit your credit report. So if you pick up the phone and pay off the debt immediately, you may be able to avoid an impact on your FICO Scores.   If the collection has already been submitted to the credit bureaus, it’s likely you’ll see an impact on your FICO Scores. Collections stay on your credit report for about seven years — even if … [Read more...]

The scores that count in mortgage lending

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So you consider yourself a well-informed consumer. You have been educating yourself about credit scores, the credit process and how lenders evaluate credit for mortgage loan applications as you are getting ready to purchase a new home. And you already know that understanding your FICO Scores is really important as they are the credit scores most commonly used in the mortgage loan review process.   You’ve pulled your FICO® Scores and credit reports at myFICO to see where you stand, but are not sure on which FICO Score versions you should focus.  Do mortgage lenders use FICO® Score 8 from all three credit bureaus? Or FICO Score 8 from one and FICO® Score 5 from another? I know, it can be kind of confusing.   Let me explain …   When you access your credit … [Read more...]

Word on the web: Don’t let the warm weather put your finances off track

With the energy and joy only warm weather and sunshine can inspire, we’re entering summer with a pension for vacations, beaches, barbeques and fun. See ya later winter. But before you start charging plane tickets and breaking your budget for a brand new grill, let’s take a few minutes to refocus on financial and credit fitness. Here are 4 articles  to help you get focused.   Consumer tips for dealing with debt The first step in managing your debt is acknowledging that you have a problem. The Dollar Stretcher walks you through 9 ways to identify the debt problem and 9 ways to fix it.   How to apply for student loans while minding your credit Applying for student loans certainly won’t ruin your FICO Scores, but it’s important to think about how student debt could have a … [Read more...]

Tips for couples: Preparing to buy a home

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Spring has sprung! And so has the peak of home buying season. As the weather gets warmer and the flowers begin to bloom, many of us suffering from cabin fever from a long winter find ourselves experiencing House Fever too.   Are you and your partner considering buying a home this year? If so, you must have some important conversations about your finances and credit health before meeting with your mortgage loan officer.   Your home purchase is likely one of the most important and largest purchases of your life; and for that reason it can be stressful on your relationship. Having healthy credit and being able to get a great interest rate on your mortgage can save you a lot of money on interest costs and make your house payment much easier on your monthly budget. Working … [Read more...]

Distributing a 401k in retirement

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For years you've been accumulating assets in your 401k plan. But now you're retiring and you know that you'll need to make some changes. What happens to your 401k when you retire? Do you need to begin withdrawing immediately? Can distributions be scheduled? Or do you have to take your money as a lump sum?   You're not alone in asking these questions. Approximately 10,000 baby boomers reach retirement age every day. And many of them have at least one 401k account.   Your 401k account is regulated by rules created by the plan administrator and by the IRS.   Your first decision is whether to leave the money in your 401k plan or withdraw it.   Most advisors will tell you to take the money out. If you choose to stay, contact the plan administrator and … [Read more...]

Are you financially healthy?

are you financially healthy

Would you describe yourself or your family as being financially healthy? What exactly does that mean?   I asked several friends and colleagues how they would define someone as being “financially healthy.” While the responses varied (most notably by age or life-stage), they did have a common theme. Namely, having a steady stream of income to meet monthly expense obligations as well as having enough left over to set aside for savings or investing.   Here are some of the responses I received:   Making a lot of money Having a sizeable nest egg for retirement Having a stable job and my kids college education paid for Owning my own home Paying all my bills and having some money left over to “splurge” on myself and my family Having all my student loans … [Read more...]

Millennials are saying “no” to credit cards. They’re making a mistake.

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Recent studies by FICO and Bankrate point to a growing trend among Millennials: they're not big on credit cards. To be specific, according to credit data gathered by FICO, the number of 18 – 29-year-olds who didn’t have a single credit card doubled from 8% to 16% between 2007 and 2012. Add to that a survey conducted by Bankrate last year in which a whopping 63% of the 1,161 respondents—also 18 – 29-year-olds—said they don’t have a single credit card.   It shouldn’t come as a surprise that younger Americans are shying away from the prospect of taking on more debt. Millennials are already saddled with over $1,000,000,000,000 in student loan debt (that’s one trillion dollars for those of you who’ve never seen so many zeroes strung together). Consider, also, that they’ve been … [Read more...]

How to prepare for your 2015 taxes now

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With tax day behind us, most tax payers (about 8 out of 10 of you) are thinking of ways to spend their refunds wisely and debating between an indulgent purchase or a responsible investment. If you’re looking for a smart way to spend your refund, this article isn’t for you (although last year we covered this topic in detail). This article is for the poor, disheartened remaining tax payers who found themselves in the negative this year.   Let’s start by noting that you should absolutely not ignore paying taxes you owe to the IRS. If your taxes are not paid in a timely manner, the IRS can report the delinquent taxes to the credit bureaus. This is called a tax lien. Tax liens are considered by FICO Scores and stay on your credit reports for seven years or more, so it’s important … [Read more...]

Why the upcoming credit bureau changes are a big deal for consumers

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The three major U.S. credit bureaus—Experian, TransUnion, and Equifax— are soon going to change the way they handle credit report errors and unpaid medical bills.   The credit bureaus maintain data on millions of U.S. borrowers—data that is used to generate your FICO® Scores—so overhauling the way disputes are handled to make fixing credit report errors easier could be good news for your scores. The new guidelines for how the bureaus will list medical debts might also have a positive impact for consumers’ FICO Scores.   The announced changes have been variously described as “huge,” “colossal,” and any other synonyms you can think of for “really, really big.” So what exactly is changing, and how will the changes affect you? Read on to find out.   What’s … [Read more...]

How to Apply for Student Loans While Minding Your Credit

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At CommonBond, we get a lot of questions from student loan applicants who are concerned about how applying for a student loan will affect their credit. The fact is, you can’t ruin your credit simply by applying – the worst that it will do is trigger a hard credit inquiry on your credit reports (more on this below) that affects your FICO® Scores in the short term. Still, there are a few ways you can manage the student loan application process wisely in order to safeguard your future scores.   1. Get as much info as you can from a lender without authorizing a hard credit inquiry   As you may know, there is an important distinction between “soft” and “hard” credit inquiries. Soft inquiries are made by businesses that check your credit report and scores even though you … [Read more...]

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