Sunday, May 24, 2009

Top 10 Myths About Credit Scores Debunked

RISMEDIA, May 7, 2009-With many Americans considering a home purchase or refinance, seeking a new job, purchasing a new car, or striving to pay off credit card debt, 2009 might be the year of the credit score, said Bills.com president Ethan Ewing.

“Many Americans hold mistaken beliefs about credit scores,” cautioned Ewing, who heads the free online consumer portal at Bills.com. “Misinformation on television and in hearsay from friends and neighbors only compounds the problem.”

Here are the top 10 commonly held myths surrounding credit scores:

Myth #1: A credit score is a credit report. The credit report is a detailed listing of all debts and payments, going back throughout an individual’s entire payment history, Ewing explained. For each entry, it shows the creditor’s name, amount owed, the highest balance owed, the available credit, whether the account is open or closed (and who closed it), the number of late payments and whether the account is in default. A credit score is a number between 300 and 850 that is based on complex formulas incorporating all the data in the credit report.

Myth #2: Those who are not in default do not need to check their credit report. Everyone should check his or her credit report at least once a year (quarterly is not a bad idea in today’s market) to be sure the report contains no erroneous information. Visit www.annualcreditreport.com for a free, no-obligation copy of the report.

Myth #3: Checking a credit report damages credit. Reviewing your own credit information has no effect on a credit score, Ewing said. Neither does a credit report review by a prospective landlord or employer.

Myth #4: Everyone has one credit score. Credit score calculations are compiled using data from three different credit scoring agencies (Equifax, Experian and TransUnion). The resulting scores might vary slightly among the three agencies if they have slightly different information, but they will be similar.

Myth #5: Married couples share a credit score. If all of a couple’s accounts are joint, their scores will likely be similar, but each individual maintains a unique credit record and credit score. On the flip side, after a divorce, ex-spouses need to follow protocol to have creditors remove either party from a joint account.

Myth #6: Shopping for a loan destroys credit. It is true that “hard inquiries” - examinations of a credit score in preparation for extending credit can have a small negative impact on credit. However, credit bureaus take into account that consumers might inquire about a loan from multiple mortgage companies or auto lenders. “If multiple inquiries are received from the same type of lender within a 14-day period, the credit scoring companies do not count each inquiry against the borrower,” Ewing explained. But credit card account inquiries to open new accounts are counted individually.

Myth #7: To improve a score, close unused accounts. An important component of a credit score is available credit, or the unused credit that has been offered (on a credit card, for instance) but not used. Closing unused cards removes those available balances from the equation and can actually lower a credit score. Today, some banks are automatically lowering limits or closing accounts to reduce their own credit exposure. Individuals whose debt load is manageable should not experience an extreme effect on their scores.

Myth #8: To boost credit quickly, just pay off bills. Credit scores reflect performance over time. Scores will not change overnight.

Myth #9: For a fee, vendors can fix a bad score. Again, credit scores show historic behavior. Be cautious about companies that claim to “fix” or “repair” credit. “You yourself can remove inaccurate information,” Ewing said. “Beyond that, be aware that some companies send credit scorers a deluge of letters asking that they verify - and in the process, remove all past negative information. If and when truthful information is verified, however, it will quickly return to the credit report.”

Myth #10: Never get help - it is too hard on credit. It is true that credit counseling, debt settlement and bankruptcy all can cause significant black marks on a credit report. “If you are in real trouble, however, you can and should seek help,” Ewing urged. “Which option you choose will depend on the severity of your situation. Credit counseling can help to manage bills, and lower interest rates and monthly payments to creditors. Debt settlement firms can negotiate to lower the principal amount of your debts, typically providing a faster path to debt freedom than credit counseling. Bankruptcy, an even more serious alternative, should be discussed with a bankruptcy attorney.”

“Credit is important, but knowing the truth about credit might be even more important,” Ewing concluded. “Before taking action that might hurt or help your score, check your facts to be sure your actions will help your financial picture.”



Read more: http://rismedia.com/2009-05-06/top-10-myths-about-credit-scores-debunked/#ixzz0GTmiolHo&B

Saturday, May 16, 2009

More First Time Buyer Tax Credit Info

Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?

The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:

The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.

The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.

Monday, May 11, 2009

Walking Away From Your Mortgage

Here is a great segment from the Today Show that was shared by one of my clients... (Thanks Jan!)

http://today.msnbc.msn.com/id/26184891/vp/30576183#30576183

Friday, May 1, 2009

Use tact with messy neighbors

by Ellen James Martin - Apr. 25, 2009 12:00 AM Universal Press Syndicate

With their third child on the way, a postal carrier and his homemaker wife were eager to sell their small, suburban house and move to a larger place in a nearby neighborhood. Their home was all ready for the market but for one snag: The next-door neighbor's yard was an overgrown mess, and they feared they'd take a hit on their home's price.
Homeowners who live near a neglected property may have to sacrifice as much as 20 percent off the market value of their home if nothing is done about the neighbors' mess, says Sid Davis, a real-estate broker and author of "A Survival Guide to Selling a Home."
Such a discount is especially likely nowadays, he says, "because buyers are looking for any rationale they can find to justify a deep price reduction."

But in many cases, home sellers living near "a neighbor from hell" can avoid such a costly discount by resolving the problem amicably, as the postal carrier managed to do, Davis says.
Though the neighbor refused to do the cleanup work on his unkempt yard, he agreed to let the postal carrier, along with other concerned residents, take on the task themselves. This helped lead to a successful sale for the postal carrier and his family.

Experts on neighbor relations say one key to such a positive outcome is for prospective sellers to try to resolve the problem with the neighbors' without an adversarial confrontation.
"Never blame your neighbors or call them jerks. Always treat people respectfully and avoid letting your anger get out of control," says Emily Doskow, an attorney and co-author of "Neighbor Law."

Here are a few pointers for home sellers seeking to get neglectful neighbors to cooperate:

• Try to reason with your neighbors.
Unless your neighbors seem dangerous or unbalanced, Doskow suggests you go to their home in person in hopes they could be willing to fix the problem voluntarily, as many people are.
"Go over to the neighbors' house with a positive attitude," she says. "Give them the benefit of the doubt. Start out with a statement such as, 'I'm sure we can resolve this together.' "
In a surprising proportion of cases, Doskow says residents who receive a neighbor's complaint in a tactful way will volunteer to take corrective action immediately.
"Take the approach that you want to provide information," she explains. "For example, you might say, 'I'm not sure if you're aware that your garbage is flowing into our yard.' "
When calling on your neighbors, Doskow recommends you go alone or with just one other person.

• Volunteer to do the corrective work on your neighbors' property.
In an ideal world, every resident of your community would maintain high standards of upkeep for their properties. They'd keep their lawns mowed, their bushes pruned and their trees trimmed. They wouldn't allow litter to accumulate in their yards or let a broken stair railing go unrepaired. But in the real world, some people are unwilling or unable to stay on top of their maintenance work, even when they're asked to do so politely, says Davis, the real-estate broker.
In your attempts to clean up a messy neighbors' property, you may be joined by other local residents who are equally concerned about the problem. Just remember to politely request the wayward neighbors' permission before you attack their cleanup work.

• Seek outside intervention as a last resort.
No matter how diplomatically you approach your neighbors, you may be repeatedly rebuffed. If so, you may need to take stronger action to get the problem solved, Davis says.
Short of a lawsuit, which could be very expensive and time-consuming, you may wish to consider filing a formal complaint with your neighborhood association (if you have one) or with your local government office, he says. Possibly you and your messy neighbors will be referred to a mediator in an attempt to settle your dispute harmoniously.